Fuel Management

How to Perform a Fuel Reconciliation

Managing fuel inventory remains top of mind for government fleets around the globe. Performing regular fuel reconciliations will help managers fully account for what they’ve paid for.

July 2010, Government Fleet - Feature

by Cheryl Knight - Also by this author

This formula can be used when conducting a bulk fuel reconciliation summary.

In these continuing cost-conscious times, managers must ensure budgets remain balanced and every penny is accounted for. Performing a fuel reconciliation can be an essential part of the fuel management process.

What is a fuel reconciliation and why is it important to your operations? Basically, it is a comparison of point-of-service metered sales with actual tank inventories from electronic tank monitors or measured stick readings. The importance of a fuel reconciliation is simple: to ensure that your operation gets what it pays for.

"Performing a fuel reconciliation allows that you get what you pay for with price, taxes, gallons delivered, and fuel card management," said Glen Sokolis, president of Sokolis Group, a fuel management and consulting company. Sokolis has worked with fleets on fuel management since 1993.

The primary benefits of regular fuel reconciliation include:

  • Controlling shrinkage.
  • Ensuring correct product ­delivery.
  • Improving environmental compliance to accepted tolerance levels.
  • Reducing administrative time required to reconcile fuel sales to stock inventory levels.

How & When to Perform a Fuel Reconciliation

When performing a fuel reconciliation, first determine the true cost of a gallon of fuel by performing an in-depth spend analysis. Make sure you use best practices by comparing current operations to industry standard pricing and performance measurements.

Sokolis also recommends developing an effective supply strategy by balancing security of fuel supply with fuel cost and margins; streamlining supply contracts with all involved — including operations, accounting, and legal groups — to maximize opportunity; and executing a fuel management program through stringent compliance.

Document, in detail, any reasons for differences found during the reconciliation process, Sokolis advised.

It is important to do a fuel reconciliation as often as possible, according to Sokolis. "If you only spot check it every few months, there is a good chance you might not be able to figure out any issues that arise," he said.

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